Tag Archives: real-estate
High property land prices in Australian capital cities bringing sales down
There is strong evidence of intensifying supply constraints in the residential land market in Australia, especially in the country’s state capital cities. The number of residential lot sales fell by 2.7% in the third quarter of 2015 while median lot prices rose by 4.2%, according to the report from the Housing Industry Association and real estate analytics company CoreLogic RP Data. The index report explains that the tightening of market conditions was concentrated in the capital cities, where prices increased by 5.4% but the number of lots transacted actually fell by 4.5%. According to Shane Garrett, HIA senior economist, with the Australian population now over 24 million for the first time, the report provides a sobering indictment of how land supply policy is not keeping pace with the housing needs of a growing population. ‘The combination of strong land price growth yet declining transaction volumes are hallmarks of a market constrained by supply bottlenecks. Ineffective land supply policy will limit Australia’s long term growth potential and erode competitiveness by forcing costs up,’ he explained. ‘The key supply side issues like planning delays, efficient infrastructure provision and the mammoth taxation burden on new housing need urgent attention. Otherwise, living standards for Australia’s 24 million residents will never reach their full potential,’ he added. According to CoreLogic RP Data research director Tim Lawless, the number of vacant land sales has been trending lower since reaching a recent peak over the June quarter of 2014, with the median land price continuing to push higher despite lower volumes. ‘Buyer demand across the vacant land market has remained strong, which is why prices are rising on lower sales, however, as land prices rise it is likely block sizes will have to reduce in order to maintain an affordable price point for buyers,’ he said. He pointed out that median lot prices have risen across every capital city over the past 12 months except for Adelaide where they fell by 1%. The tight supply of land across Sydney has seen median land prices rise by the most of any capital city over the past year, up 22.8% compared with a weighted average across the capitals of 10.7% growth. ‘Despite having the most expensive housing and vacant land, Sydney is currently showing the second largest median lot size amongst the capital cities at 537 square metres. Somewhat counterintuitively, the median land area has historically been the smallest in Adelaide, with the September quarter data showing a median lot size of just 375 square metres,’ Lawless said. Continue reading
Home owners in London more confident about house price increases than rest of UK
Households across the UK believe that the value of their home increased this month with people in London more so than the rest of the country, says the latest house price sentiment index. Households in all of the 11 regions covered by the index reported that prices rose in February, led by households in London at 68.1 and the East of England at 62.3. Households in Scotland reported the most modest rate of growth at 51.7 followed by the North East at 53. The data from the Knight Frank/Markit index also shows that households expect house prices to rise over the next 12 months, with the strongest growth expected by households in the South East. However, the rate of growth expected over the next year eased compared to January and while 23.2% of the 1,500 households surveyed said that the value of their home had risen some 4.1% said that prices had fallen. This resulted in a HPSI reading of 59.6, the 35th month in a row that the reading has been above 50. Any figure over 50 indicates that prices are rising, and the higher the figure, the stronger the increase. Any figure below 50 indicates that prices are falling. Indeed, February’s reading was the highest recorded by the index since October 2014, indicating that households perceive that the value of their home rose at its strongest rate since then. However, February’s reading remains well below the peak of 63.2 reached in May 2014, reflecting the easing in average UK house price growth seen since then. The future House Price Sentiment Index (HPSI), which measures what households think will happen to the value of their property over the next year, fell in February to 69.8, from 70.5 in January. While still indicating that households across the UK expect the value of their home to rise over the next 12 months, the future HPSI remains below its peak of 75.1 reached in May 2014. There remains a clear north-south divide in terms of the outlook for house prices, with households in Southern England more confident about future growth over the coming 12 months. Indeed, households in the South East were the most confident that prices will rise at 78.7, followed by Londoners at 77.8 and those in the South West at 74.1. In Scotland, the North East and Wales expectations for future price growth remain positive, but are more subdued at 62, 60.6 and 62.5 respectively and the data also show that those who own their home outright are the most confident that prices will rise over the next year at 75.4, followed by mortgage borrowers at 75.2. ‘The HPSI indicates that house prices are set to continue to tick up modestly in the coming months. The market is being underpinned by the solid economic recovery and ultra-low interest rates which now look as if they will stay put for some time to come,’ said Gráinne Gilmore, head of UK residential research at… Continue reading
Nationally home prices in Canada up 17% year on year
Residential property sales across Canada edged upwards from December to January with annual transactions increasing by 8% compared to a year ago. The data from the Canadian Real Estate Association (CREA) also shows that home prices were up 17% year on year but not everywhere with British Columbia and Ontario seeing values fall slightly. Month on month sales increased by 0.5% and this lifted national sales activity to the highest level since late 2009. The number of local housing markets was almost equally split between those where sales were up from the month before, and those where sales were down. Monthly sales increases in the Greater Toronto Area (GTA) and Lower Mainland of British Columbia fuelled the national sales increase and offset monthly sales declines in Calgary, Edmonton and the Okanagan Region. ‘Single family home buyers in the GTA and Lower Mainland of British Columbia had been expected to bring forward their purchase decisions before tightened mortgage regulations take effect in February 2016,’ said CREA president Pauline Aunger. ‘If listings in these and nearby markets were not in such short supply, January sales activity would likely have reached even greater heights. Meanwhile, other major urban housing markets have an ample supply of listings, particularly where some home buyers have become increasingly cautious amid an uncertain job market outlook,’ she added. CREA chief economist Gregory Klump pointed out that single family homes in the GTA and Greater Vancouver areas were in short supply amid strong demand in contrast to side lined home buyers and ample supply in a number of Alberta housing markets. ‘Tighter mortgage regulations that take effect in February may shrink the pool of prospective home buyers who qualify for mortgage financing and cause national sales activity to ease in the months ahead,’ he added. A breakdown of the figures shot that actual, not seasonally adjusted, is now 2.6% above the 10 year average for the month of January. Activity was up compared to January 2015 among roughly two thirds of all local markets. B.C.’s Lower Mainland and the GTA again contributed most to the national increase. Greater Vancouver saw the biggest rise in annual prices with growth of 20.56% followed by the Fraser Valley up 16.94% and Greater Toronto up 10.69%. Home prices in Victoria increased 7% and were up 5.5% in Vancouver Island. By contrast, home prices fell by 3% in Calgary, by 2% in Saskatoon, and by less than 1% in Regina. While home prices have begun to decline in Calgary and Saskatoon only fairly recently, they have been trending lower in Regina since early 2014. Prices crept higher on a year on year basis in Ottawa by 1.10%, increased by 1.48% in Greater Montreal and were up 6.57% in Greater Moncton. The actual, not seasonally adjusted, national average price for homes sold in January 2016 was $470,297, up 17% year on year but continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most… Continue reading
